National firm Irwin Mitchell has insisted that a 29% fall in annual profits was expected given the level of investment in the business.
In accounts published today for the year ended 30 April 2023, the Irwin Mitchell Group reported that profit before tax fell from £21.2m to £15m on overall revenue up slightly to £276.4m. The figures take account of decreasing revenue and profit from the firm's volume personal injury business, which is effectively in run-off and not part of the long-term future.
Profits are calculated after partners are paid. Group lock-in days crept up to 207 days, while cash reserves declined from £49.7m to £41.7m.
The firm has not disclosed partner pay or published a profit per equity partner figure.
Chair Glyn Barker said the results were ‘broadly in line’ with expectations and that the group had made good progress across its strategic objectives.
Barker added: ‘Global economic forecasts suggest that the coming financial year will be another challenging year as inflationary pressures, in combination with the high interest rate environment and general cost-of-living crisis, will impact many consumers and businesses adversely.
‘However, the quality of our people, combined with the breadth of services and ongoing investment, supported by the strength of our balance sheet, gives us the confidence that despite the considerable headwinds, we will deliver further strategic progress in FY24.’
Irwin Mitchell said it had ‘invested significantly’ in growth, new technology, client service, acquisitions, 18 lateral partner hires and a reorganisation of its office portfolio. It opened two new offices in Cardiff and Liverpool and repurposed office space in other locations. Over the next 12 months, the group will aim to broaden its presence in the south and south east region.
Group chief executive Andrew Tucker said the profit drop ‘reflected the higher levels of planned investments in our IT infrastructure and data capabilities, marketing spend and transaction-related professional fees to help position the business for long-term growth’. There were also higher operational costs and one-off £3m costs from the relocation of the firm’s Gatwick office.
Irwin Mitchell operates a corporate structure so equity partners and some retired equity partners hold shares issued by the firm. Dividends paid to ordinary shareholders doubled to £3m compared to last year.
Back in 2021 Irwin Mitchell was reported to be exploring a £500m stockmarket flotation. The firm denied at the time it had any plans for external investment.
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